Breaking News

Tesco Falls as Much as 11.8% After Saying Profit Overstated

Kingfisher Air Revival Suffers Setback as India Rejects Plan

Kingfisher Airlines Ltd. (KAIR)’s revival plan was rejected by the Indian government, setting back the company’s efforts to restart operations after it grounded flights following five years of losses.

The 6.5 billion rupees ($119 million) that parent UB Group pledged to provide Kingfisher isn’t adequate to ensure reliable services, an official at the Civil Aviation Ministry said in New Delhi today. The plan submitted to the regulator doesn’t provide for payments of money owed to airports, said the official, who asked not to be identified, citing government rules.

Kingfisher, the only Indian carrier to order Airbus SAS superjumbos, aims to restart operations this year with seven aircraft, Chairman Vijay Mallya said in an e-mail to employees yesterday. The airline, which lost its license on Jan. 1, has been talking to investors such as Etihad Airways PJSC.

Kingfisher gained 0.6 percent to 14.79 rupees at 12:15 p.m. in Mumbai trading, after rising as much as 9.9 percent. The stock fell 29 percent last year and slumped 68 percent in 2011.

The Bangalore, India-based carrier also defaulted on payments to fuel suppliers, creditors and airports as losses widened amid rising fuel costs and price competition. Kingfisher, which was No. 2 in India by market share in 2011, has debt of 85 billion rupees.

To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at

To contact the editor responsible for this story: Anand Krishnamoorthy at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.